The 55th GST Council meeting, chaired by Finance Minister Nirmala Sitharaman, did not reach a consensus on bringing Aviation Turbine Fuel (ATF) under the ambit of Goods and Services Tax (GST).
The proposal, supported by the aviation industry to reduce taxes and cut costs, remains a debated issue between the states and the central government. Thus, it needed more time for the centre to decide.
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ATF, is an important input for the aviation sector, is currently subject to Value Added Tax (VAT) by states, resulting in varying tax rates across the country.
Including ATF under GST is considered a move to simplify taxes and provide relief to airlines struggling with high operating costs. However, the proposal faces opposition because states worry about losing revenue from VAT on ATF.
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During the meeting, stakeholders expressed differing views, with some states stating the impact on their revenue streams and others recommending a well-organized tax regime to support the aviation industry.
The meeting was attended by Union Minister of State for Finance, Shri Pankaj Chaudhary, Ajay Seth ( Revenue Secretary) along with Chief Ministers from Goa, Haryana, Jammu and Kashmir, Meghalaya, and Odisha, and Deputy Chief Ministers from Arunachal Pradesh, Bihar, Madhya Pradesh, and Telangana.
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